An investor bought a $7,500 bond with a coupon rate of 5.3% compounded semi-annually. At the time of purchase, the bond had a yield rate of 4.4% and nine years until maturity. Four years later, the investor sold the bond when the yield to maturity was 5.5%. a. At what price did the investor purchase the bond? b. At what price did the investor sell the bond? c.What was the investor's capital gain or loss on the investment?
An investor bought a $7,500 bond with a coupon rate of 5.3% compounded semi-annually. At the time of purchase, the bond had a yield rate of 4.4% and nine years until maturity. Four years later, the investor sold the bond when the yield to maturity was 5.5%. a. At what price did the investor purchase the bond? b. At what price did the investor sell the bond? c.What was the investor's capital gain or loss on the investment?
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 16P
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An investor bought a $7,500 bond with a coupon rate of 5.3% compounded semi-annually. At the time of purchase, the bond had a yield rate of 4.4% and nine years until maturity. Four years later, the investor sold the bond when the yield to maturity was 5.5%. a. At what price did the investor purchase the bond? b. At what price did the investor sell the bond? c.What was the investor's
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